Ratio and Financial Analysis of Computron
Ratio analysis is the overall numerical values of an organization collected from income statements and balance sheets of a company to evaluate its financial performances. Investors, creditors, and potential shareholders used the ratios to evaluate the financial performances and financial health of a company. The management can also use the ratios to analyze the organizational performances. Profitability ratio, current ratios and efficiency ratios are the three groups of ratios used to evaluate organizational financial performances. Profitability ratios measure the ability of a company to turn its assets into profitability. The current ratios measure the ability of a company in using its current assets to meet its short-term obligations. Efficiency ratios reveals the ability of a company to utilize its inventory or assets efficiently.
b. This section calculates the company current ratio and quick ratios.
Current ratio =Current Asset/Current Liabilities
Current ratio = $2,680,112 / $1,039,800 = 2.6
Quick Ratios = (Current Asset -- Inventories) / Current Liabilities
Quick = $2,680,112 / ($1,039,800 -1,715,480 = 0.9
Table 1: Computron's Ratios
2014
2014
Current assets
2680112
Current Liabilities
1039800
Inventories
1716480
Account Receivables
878000
Current Ratios
2.577526
Quick Ratios
0.926747
Total Assets
3516952
Sales
7035600
Net Fixed Asset
836840
Inventory Turnover
4.098853
Days Sales Outstanding
45.54978
Fixed Asset Turnover
8.407342
Total Asset Turnover
2.000482
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